The sustainability of independent ASCs is becoming an increasing concern as rising practice costs outpace reimbursement rates.
Many ASCs are feeling the financial squeeze, and some leaders worry about the challenges of maintaining physician ownership, particularly as aging surgeons fail to transition the business to younger physicians.
Jeffrey Flynn, administrator and COO of New York City-based Gramercy Surgery Center and president of the New York State Association of Ambulatory Surgery Centers, told Becker’s about the sustainability issues in his state.
“I’m concerned that some of the centers in the state just won’t be here in five years,” he said. “I think there’ll be new ones, or different ones, but there’ll be ones gone for various reasons. You know, suddenly they wake up one day, and all the doctors are 70 and they never let anybody younger buy in.”
Beyond ownership transition challenges, financial pressures from payer negotiations continue to be a major hurdle. ASCs often lack the large-scale bargaining power of hospital systems, making it difficult to secure favorable reimbursement rates.
“They’re all independent small businesses, so they don’t have that resource to work together,” Mr. Flynn said. “I’m concerned about what’s next.”
While ASCs have traditionally thrived by focusing on efficiency and high-quality patient care, these external pressures may reshape the landscape in the coming years. Mr. Flynn and other leaders expect some centers may close, while others may be acquired or consolidated into larger healthcare entities
Independent ASCs are increasingly facing the reality of being acquired by larger entities due to financial constraints. Many are being “bought out by larger entities because they can’t sustain themselves,” Bill Rhoades, COO of Harrisburg (Pa.) Endoscopy & Surgery, told Becker’s. “Their return on investment is lower than expected.”
The ASC industry is consolidating, albeit slowly. The number of independently-owned ASCs dropped to 67%, down from 68% in 2023, according to a report from VMG Health.
To adapt to the shifting financial environment, ASCs are exploring innovative solutions to sustain growth.
“To sustain growth in an environment where business costs are rising, ASCs must look closely at every aspect of operations and cost-savings potential, opportunities to streamline workflows, and ways to improve technology while maintaining the utmost commitment to patient care and quality,” said Taryn Bradtmueller, BSN, RN, regional director of ASCs at Ballwin, Mo.-based EyeCare Partners. “I believe ASC leaders should stay informed about new opportunities and be open to exploring different specialties. Building relationships within your community and effectively marketing your ASC to potential surgeons can help you stay at the forefront of surgeon groups’ minds.”
Additionally, ASCs should consider the financial advantages of group purchasing organizations to maximize cost savings.
“Most ASCs belong to one of the large GPOs, where they can save significantly, but there are also specialty specific GPOs available that most ASC administrators don’t avail themselves of, often because we believe that we are great negotiators,” Robert Nelson, PA-C, former executive director of Island Eye Surgicenter, told Becker’s. “That may be the case, but negotiating supply costs for several hundred or several thousand cases for your center cannot compare to the significant negotiating power of the specialty GPOs that may represent a hundred thousand plus (or more) cases represented by their member facilities.”
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